Investors seeking high and dependable dividend yield amid ongoing volatility could consider Energy Transfer (ET). Its resilient cash flows, consistent dividend growth, and a high forward yield of 7.6% make it a compelling income stock.

Energy Transfer operates a vast network of over 130,000 miles of pipelines and extensive energy infrastructure across 44 states in the U.S. This strategic footprint positions it as a key player in transporting and storing natural gas (NGK25), crude oil (CBM25), and natural gas liquids (NGLs). Additionally, the company owns significant stakes in Sunoco (SUN) and USA Compression Partners (USAC), further diversifying its operations.

ET’s Resilient Business Model Supports Strong Dividends

The key factors that make Energy Transfer a reliable dividend stock are its resilient business model, with strong cash flows and predominantly fee-based earnings. Its fee-based earnings insulate it from the fluctuations of commodity prices. This model ensures stable, long-term cash flows, allowing Energy Transfer to maintain and grow its dividend. The company raised its quarterly cash distribution by 3% earlier in April 2025, reflecting its commitment to returning higher cash to shareholders.

The company’s strategy to maintain and enhance profitability revolves around several key initiatives. Energy Transfer is working to maximize the potential of its existing assets by securing new volumes through long-term producer commitments. Additionally, it is taking steps to boost operational efficiency, reduce costs, and enhance asset utilization. These efforts ensure that Energy Transfer can maintain its strong cash flows even in challenging market conditions.

Beyond organic growth, Energy Transfer has been actively pursuing strategic acquisitions to expand its footprint. Its recent acquisition of WTG Midstream brought a growing supply of NGLs and natural gas into Energy Transfer’s network. As a result, the company is boosting revenue from gathering and processing these resources and through additional fees tied to downstream transportation and fractionation services. These smart acquisitions are helping Energy Transfer build a more diversified and resilient income stream.

Energy Transfer’s extensive infrastructure gives it a unique advantage. With operations spanning all major U.S. energy supply basins and access to domestic and export markets, the company is well-positioned to generate consistent cash flow. This geographic reach, combined with the stability provided by its fee-based business model, enables Energy Transfer to forecast steady growth, including an annual dividend increase of 3% to 5%.

Expansion Into Power and Data Center Markets

The company’s growth isn’t limited to traditional energy transport. Energy Transfer is actively expanding its role in the power sector, leveraging its infrastructure to support natural gas-fired power plants and data centers. Demand for natural gas remains strong, especially amid the transition away from coal. In recent months, Energy Transfer has secured several key agreements to supply natural gas to electric utilities, data centers, and manufacturing facilities.

In the fourth quarter, Energy Transfer reached a deal to supply 90 million cubic feet of natural gas daily through its EOIT pipeline, a project set to come online in 2026. Additionally, the company has entered a long-term agreement with CloudBurst data centers, supplying natural gas to their next-generation facility in Central Texas. This project is Energy Transfer’s first venture into providing natural gas directly to a data center. The company has received similar requests from over 70 data centers and 62 power plants across 12 states, highlighting the growing demand for its services in this sector.

Analyst Outlook: A Strong Buy for Income Seekers

Given its vast and diversified energy infrastructure assets, strategic acquisitions, and consistent cash flow, Wall Street analysts are optimistic about Energy Transfer’s future. ET stock has a consensus rating of “Strong Buy” and offers a compelling forward yield of 7.6%, making it one of the top investments to generate steady income.  

The Bottom Line

Energy Transfer is a dependable income stock. The company plans to increase its fee-based business further to lock in stable, long-term cash flows while reducing exposure to volatile commodity prices. It also aims to leverage its existing assets and customer relationships to meet rising demand for midstream and transportation services.

With these strategic moves, Energy Transfer is well-positioned to deliver solid distributable cash flow, which will drive its future payouts.